Is the Flats Sequencing System going to revolutionize the Postal Service’s handling of catalogs and magazines or is it destined for failure? Good question.

The evidence is mixed, partly because USPS has been forthcoming about some aspects of FSS but secretive about others.

Mailers report little trouble with the few FSS machines that are operating so far. And some are impressed by postal officials' efforts, after some initial hiccups, to work with industry on creating an efficient, “lowest combined cost” approach to the handling of catalogs, magazine, and other flat mail.

But postal officials were also caught off guard by the rapid decline in flat mail, which has forced them to rework the locations and schedules for Phase I (the first 100 machines) of the FSS program. And Northrop Grumman, which is building the machines, reportedly reassigned all of the engineers who had been working on FSS after the machines failed two USPS acceptance tests.

USPS has a split personality when it comes to talking about the Flats Sequencing System. It has provided lots of information about the new technology but not answered some basic questions that have been kicking around for a couple of years.

It has created an FSS Web site bringing together various documents related to FSS and a neat video (above) showing the FSS in action. But it put the video on YouTube without referencing the video on its own Web sites. And it has had trouble keeping the list of FSS locations up to date.

To clear up the mysteries and confusion, Dead Tree Edition here offers answers to frequently asked questions about FSS:

Q: What is the purpose of FSS? A: The most straightforward answer comes from a report issued by USPS' Office of Inspector General (OIG) report, rather than the PR or marketing folks: “The mail processed by the FSS will arrive at the delivery unit in walk-sequence order, ready for delivery by the carrier with no additional mail movement or manual sorting required. Savings should result when delivery units can eliminate the requirement for mail carriers to manually case flat mail. A small reduction in clerks’ work hours at delivery units should also result, since employees would no longer need to move FSS-processed mail to the carrier casing areas.” The best description from the Postal Service itself comes from an obscure cost study: “The Flats Sequencing System (FSS) machine sorts flat mail into Delivery Point Sequence (DPS) for carrier delivery. This program eliminates the last significant manual sortation currently performed by carriers before leaving the office. Since FSS machines will be deployed in processing plants, the FSS program will shift processing activities from delivery units to processing plants.”

Q: How many people will be laid off? A: Using data from USPS, Dead Tree Edition estimates that the Postal Services envisions the first 100 machines resulting in elimination of about 6,000 delivery-related jobs, mostly letter carriers. But we have no way to verify the accuracy and repeatability of the results from Reston Annex, VA on which the projection is based. And we’ll point out that, because of attrition, not every job elimination results in layoffs. Dead Tree Edition has also shown that FSS will apparently result in, or contribute to, consolidation of the flats dropship network (known as processing and distribution centers in postal-speak), which presumably will result in more job eliminations. Lettercarrierconnection.com has a great FSS page with links to numerous documents, many of them related to the system's impact on postal workers. And check out the "Automation and the Life of the Letter Carrier", including the comments, at the blog published by USPS's Office of Inspector General.

Q: Why were these locations chosen? A: The Postal Service chose the locations with the greatest potential for savings. That generally means processing plants serving areas with the highest numbers of relevant flats (generally Periodicals and Standard classes) per delivery point. Another factor was buildings with enough space for at least two of the enormous machines.

Q: How much will the machines save the Postal Service? A: The Postal Service isn’t saying, but the OIG report says “FSS is expected to generate operational savings of between $593 million and $677 million annually.” That’s consistent with Dead TreeEdition’s conservative estimate that the Postal Service envisioned delivery savings of at least $420 million (at least 5 cents per flat) from Phase I, but the calculations are actually quite different. Dead Tree Edition considered only delivery costs, while the OIG report presumably looked at all factors – impact on sorting costs, equipment maintenance, real estate, and depreciation as well as delivery costs.

Q: Will the savings be shared with the customers in the form of lower postal rates? A: Don’t count on it. Facing a $2.8 billion loss in the last fiscal year and declining mail volumes, USPS no doubt will use the money to improve its financial situation rather than to decrease average prices. Postal officials have said informally that dropshipped flats handled via FSS will cost mailers less than if they had been dropshipped in traditional carrier-route bundles. But that is likely to mean higher-than-normal rate increases for non-FSS flats, so that the average rate increases for each class will be close to the rate cap, which is determined by changes in the Consumer Price Index. Publishing Executive's article "Pushing the Envelope" has an extensive discussion of FSS from a customer perspective.

Q: You mean we will have two sets of rates for flats, one for FSS and one for non-FSS areas? A: Probably. Postal officials are still working with the mailing industry to determine the best way to package FSS flats, but it’s clear that at some point mailers will no longer be creating carrier-route bundles for areas served by FSS and that the rules for bundling and containerization will change. Trying to avoid the kind of delays and miscommunication that have plagued the Intelligent Mail Barcode (IMb) program, both postal officials and mailers are reportedly trying to work out all issues before the new rules and rate structure are announced. Some of the work revolves around optimal bundle sizes and how best to strap or band pallets. In the meantime, mailers are packaging mail in the traditional way (for example, carrier-route bundles and SCF pallets), which is not optimal for the FSS machines that are already running.

Q: How will FSS flats be packaged? A: It looks as if mailers will create larger bundles for FSS facilities than for non-FSS facilities. The bundles may cover an entire FSS scheme (typically, two to four ZIP codes that are processed on the equipment at the same time). Ideally, mailers will create scheme pallets, but that will be extremely rare except for huge mailstreams (those containing more than 3 million pounds) unless the minimum weight for pallets is reduced. Probably the next step down will be machine pallets, which will contain copies for all of the schemes (typically about seven) that will be worked on the same FSS machine. The next step down after that may be FSS pallets, containing copies going to all of the FSS machines in a facility. There may be some mixing of FSS and non-FSS copies on the same pallets. The use of tubs instead of sacks is being investigated for flats that mailers cannot palletize.

Q: If there are no carrier-route bundles, will it make sense to co-mail FSS copies? A: Yes, according to postal officials – presumably because co-mail will produce more finely sorted bundles and pallets and spread the costs over multiple mailers. But we won’t really know until we see the FSS rate structure.

Q: Why did mailers have to change the way they address their flat mail? A: For FSS to be optimal, letter carriers will need to be able to determine quickly which flats get delivered to the next address. Because the catalogs and publications will be upright in a tub with all of the spines facing right, the best way to do that is to have all of the addresses right-side up in the upper right portion of the cover that faces the carrier. As a result, most magazines are now placing addresses up-side down in the lower left quadrant of the front cover, while most catalogs are addressing right-side up in the upper right portion of the back cover. The new addressing rules, which apply to flats going to non-FSS areas as well, took effect on March 29, 2009.

Q: What about newspapers? The official answer is that newspapers going to FSS zones will be processed on the FSS “to the extent possible”. But there is some skepticism in the mailing community about how the machines will handle some newspaper formats. It’s also not clear to what extent in-county Periodicals and other locally focused publications will be encouraged or forced to enter their mail at FSS facilities rather than at their local post offices.

Q: What about saturation mail? Postal officials say that saturation mail will bypass FSS but that high-density mail will be processed on the machines.

Q: How much do the machinescost? USPS has a contract to pay Northrop Grumman Corporation $874.6 million for the 100 systems in Phase 1, but the OIG refers to Phase I as a $1.4-billion investment. Most machines will go into existing buildings, but there are a few new buildings, plus some modifications to existing buildings.

Q: Did the Postal Service make a good investment? A: Investing $1.4 billion to save between $593 million and $677 million annually would certainly be a good investment; the investment would pay for itself in barely two years. See Can the Flats Sequencing System Be Fixed? for more information about a couple of potential problems in achieving those savings. FSS Throughputs 9% Below Plan, USPS Official Says explains how the drop in flats volume has hurt the machines' productivity.

Q: How much of the country will be included in Phase I/1A? A: It looks as if the latest plan will involve roughly 25% to 30% of the flats the Postal Service handles. The percentage should be higher for mail going mostly to affluent urban and suburban dwellers. By the way, postal officials are already planning Phase II and considering whether to pursue new technology that would sequence letter and flat mail together.

Q: How will firm bundles be handled? A: Postal officials say there will still be Periodicals-class firm bundles but indicate that firm bundles containing only a few copies in FSS zones may no longer make economic sense for mailers.

Q: How will FSS affect the timeliness of delivery? A: The critical entry time for next-day delivery will be noon for sacked Standard flats, 4 p.m. for palletized Standard mail, and determined on a facility-by-facility basis for Periodicals and First Class. In theory, FSS will make the day of delivery more predictable. For example, letter carriers sometimes forgo manual casing on days when they have heavy volumes, delaying delivery of flats. But “News” Periodicals (daily and weekly publications) may see some deliveries delayed by a day. They may need to enter mail by mid-afternoon at an FSS facility to get next-day delivery, while entering in the late afternoon or early evening at a non-FSS Sectional Center Facility (SCF) typically gets them next-day delivery.

Q: How will FSS affect dropshipping? A: It has already led to consolidation of dropship facilities and will probably lead to more, which is good for mailers. Unfortunately for mailers, the FSS-related consolidations will tend to affect dropship facilities in densely populated areas, rather than those in such hard-to-reach locations as El Paso, TX and Clarksburg, WV. The good news is that the FSS dropship locations will be identical for Periodicals and Standard classes; that is not always true for dropshipping of non-FSS flats.Please submit additional questions, as well as suggestions and other FSS information, to Dead.Tree.Edition@gmail.com.

14 comments:

Anonymous
said...

As usual the Post office bought all these flat sorting machines on speculation. Was it someones brother-in-law selling them? In a few years, (months)? we won't have any flats to sort!!! I wonder if anyone was paying attention when email and online catalogs were coming into being. All that equipment and nothing to use it for...Typical Government contract. The reason the PO is losing money is because it keeps buying outdated and over priced equipment.

And the spines on the right will cost me more time on the street. I have a curbline route and case all of my flats with the spine to the bottom of the cell - all of the spines are to the left in my tray when pulled down. On the street I pick up the bundles with my left hand and it's easier to 'thumb' through and pick them up. I also like to place the spine of the flat to the left, bottom corner of the mail receptacle - that way it lays flatter and neater in the box. During the test period in I believe Virginia, the FSS machines saved the post office 2 hours per route on office time, but it took the carrier 1 hr 40 minutes longer on the street -- so the savings per route was only 20 minutes. Let's give 'em a big WHOOP-TI-DO! Go to my website to access more info on FSS and anything else you're looking for: www.lettercarriernetwork.info

As per usual the Post Office or the OIG or the general public doesn't think everything thoroughly. PO management under staffs now in order to save money (so they say),curtailing mail is a way of life in most if not all post offices across the nation. They do this so that the staff they have on hand will show down time and be forced to carry extra mail from a vacant route. Sometimes this requires forced overtime on some carriers who due to personnel reasons want only to work and eight hour day, yet this is not an option with the PO. So with the FSS system you no longer have that option, we will take everything everyday, and they said we will be able to down size the work force? Oh yes now I see they will layoff as many carrier emplyees and hire anyextras they need on a daily bases from the work force that will be standing outside the local post office any given day for minimum wage and no benefits, way to go Post Master General you'll make us a third world company yet and get your million dollar raise!

As usual, the cost savings does not include the $$millions related to injuries related to carriers walking 2 hours a day more than they already do. Also, if DPS is any indicator the FSS will never handle nearly as much mail as they estimate and we will still sort some of it by hand, which will lower the cost savings even further.

Current problems with DPS letter-mail still persist. More often than you'd believe, DPS mail is sent to the stations unsorted properly. Sequencing-order sounds great, but when you have to walk a seven hour route in six and somehow fix and deliver up to 250 missorted letters completely out of sequence, then it's not so great.

In reference to your comments about two FSS machines going to San Diego from San Francisco because there is room for them... There is no room at the inn in San Diego. I heard that we are in for a major, expensive remodel of the facility before the FSS comes to San Diego. And, a shovel has not penetrated the ground yet.

well we finally received the FSS machine.. WHAT A DISASTER and a complette mess. We all work an average of 10 to 12 hours a day some walk routes and some curbside routes. They abolished 3 full routes and we lost a float position. We all work overtime , sick calls have increased and injurys have increased. Most of us letter carriers HATE THE JOB now ..We are praying for a route or 2 to be put back in the office. lets see what the UNION will do..FSS has made the letter carrier job a lot more difficult and more physical than ever before. They (managment) used CORE to re route the office ..What a nightmare. We all were going around in circles..Making circles inside circles. UNTIL we had to change the delivery order of the routes that the letter carriers had there input.I dont know how they will save money because they are paying at least 50 house a day in overtime..DO THE NUMBERS REALLY MATCH UP?

If FSS and DPS, for that matter, came into the office in perfect condition, there would be definite savings in both the carrier and clerk crafts. However, the reality is that whatever savings the carriers experience in the office is more than made up on the street, usually resulting in overtime. Problems with missorts and missents persist. And when you consider varying delivery methods; ie. curbside delivery, walking routes, businesses, cluster boxes, or centrally located boxes in apartment or office buildings; each of which have their own delivery peculiarities, there is no way to have one set method of delivery. If postal management had taken the input of the Union and individual carriers, including rural carriers, many of these problems could have been foreseen and possibly accounted. Now carriers have to try and pick up the pieces and fix what management didn't, yet getting no time what-so-ever to correct the problems.